The Great Depression

The Great Depression

The 1930's were a sad time for many. It is the time when the stock market crashed, banks closed, and millions were left penniless. To fully understand the events of the 1930's and the Great Depression, one must first understand the economic terms of that period, as well as the many acts and groups that contributed to helping the nation get back on its feet. The business cycle is the pattern of economic rise and fall. A depression is a period of economic failure. During a depression, there is a great surplus on goods. Since people were jobless and without money, people couldn't afford to buy goods, so things didn't get sold very quickly. Recession is like a mild depression. Prices and demand falls, while a surplus is built. Workers get laid off, but on a smaller scale than an actual depression. Recovery is the correction of a depression. During recovery, surpluses slowly become used up. The companies rehire workers. Workers now have money, so they start to spend, and money starts to circulate again. Prices rise with demand, and the supply falls more. In a period of inflation, supply goes down. When the supply falls, demand increases. With the demand up, stores can increase prices. Relief is helping people in poverty overcome it. Reforming is the act of preventing future depressions.

In the Great Depression, everything in the nation went to pieces. The stock market crashed. Everyone with stock lost the money they invested. Banks, who used customers' money to gamble in the market, lost their money. People who had money in the banks lost all or most of their money. With no money to spend, demand for goods fell. Prices were lowered, hoping that some people would still buy at the new prices. Businesses didn't make enough money and had to fire workers. Shopkeepers closed their stores, and farmers lost their farms. With no money coming in to their household, these people couldn't spend money...